In the United States, foreign trade zones (FTZs) are the domestic equivalents of international “free trade zones,” intended to encourage healthy competition with foreign businesses. These zones directly help U.S. companies who either import products or components from foreign countries by reducing, deferring, or eliminating duties and by allowing for greater supply chain efficiency.

San Antonio’s Foreign Trade Zone

As a city committed to maximizing its presence in the global economy, San Antonio is an ideal location for businesses interested in increasing their export power. With its engagement in globally-oriented economic programs and its optimal geographic location, the city provides a wide array of business opportunities, a quality enhanced by its Foreign Trade Zone designation.

Why San Antonio?

City’s goal: to strengthen its role in the global economy through FDI and export growth.

Developed a strategy to:

Attract foreign direct investment.

Increase export goods and services.

Promote tourism in addition to cultural and educational exchanges.

Showcase best practices in San Antonio’s municipal government.

Participant in the Brookings Institute’s first Metropolitan Export Exchange program:

One of the original eight cities in the U.S.

Designed to increase amount of exports in San Antonio to create jobs and economic growth

Part of the Brookings-Rockefeller Project to facilitate an exchange of best practices in international trade

Location

FTZ consists of all of Bexar County, as well as parts of Comal and Guadalupe counties

Optimal geographic location:

Crossroads of Interstates 35 and 10

Easy access to Canada, Mexico, and both coasts

Proximity to the ports of Corpus Christi and Houston provide access to ocean shipping

Located just 8 miles north of downtown at the crossroads of U.S. Highway 281 and Loop 410, providing easy highway access

Primary airport serving an area population of an estimated 2 million

Facilities include 49.7 acres of ramp, 164,280 square feet of warehouse space, and an on-site U.S. Customs office.

Strategic geographic location with ideal business and transportation infrastructure

Port San Antonio:

Located at the former Kelly Air Force Base, now repurposed and redeveloped

Easy access to both Interstates 35 and 10

1,900-acre site featuring an industrial airport, a railport, an on-site U.S. Customs office, and mixed-use development

Accessing Benefits

Essentially, foreign trade zones help businesses reduce production, transaction, and logistics-related costs by allowing them to defer paying customs costs on goods imported into the U.S. until those goods leave the zone for consumption. Benefits include duty deferral, duty exemption, avoiding inverted tariffs, and logistical benefits.

FTZ Operation Types

Storage: Foreign and domestic merchandise may be stored within the zone for an unlimited period of time, thereby avoiding all duties and excise taxes.

Manufacturing: products manufactured within the zone, including foreign merchandise, can face reduced duties if the tariff rate on the finished product (the product leaving the zone) is lower than the tariff applied to the initial components (the product entering the zone).

Disposal: Waste materials and damaged or valueless merchandise can be destroyed within the zone without encountering duties.

Benefits for Foreign Trade Zone Users:

Avoid payment of duties on imported goods that are later re-exported or are used in manufacturing domestic goods

Delay payments of duties on goods that enter the U.S. market

Eliminate duties on waste, scrap, and rejected/defective parts

Reduce or eliminate duties on quota charges for merchandise leaving the zone

Avoid quota restrictions until merchandise leaves the zone

Reduce merchandise processing fees, since zone users are allowed to file a single customs entry—and pay a single fee—per week, instead of filing and paying per entry